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Riot and NA LCS team owners reflect on their first franchised split

By Sharon Coone

Apr 12, 2018

Rick Fox: I lose sleep over C9, TSM, and CLG not being here this weekend. Because I know the preparation has begun for some of them already.

A day prior to the Spring Split finals, Blitz Esports sat down in Miami with NA Head of Esports Chris “Chopper” Hopper, Echo Fox Founder Rick Fox, 100 Thieves Founder/CEO Matthew "Nadeshot" Haag, and Team Liquid Co-CEO/Owner Steve Arhancet. The meeting followed the first major NA LCS owners conference, a time for Riot and team owners to assess the success of the franchise so far.

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Sharon, Blitz Editor-in-Chief: We’re here to talk about the first split of LCS franchising, especially because Riot just held its post-split owners meeting. Could you explain what goes down there?

Riot Chopper: Today was the second NA LCS owners conference that we've had. We had one earlier in the year back in Los Angeles, but this was the kind of the owners conference to sort of recap the Spring Split, talk about how things went from viewership and branding perspective, how some of the various new initiatives that we launched panned out. It’s really just to give a frank opportunity for teams and Riot to talk about the things that are important to them: understand where pain points are, what changes we can make for the Summer Split and going on into 2019.

Sharon: Let's start with the positives. What do you guys think are some good things that came out of franchising this year?

Steve: For Team Liquid, we were always apprehensive to make large scale investments into League of Legends because we may have been removed from the league. And with franchising, we made some pretty substantial investments into the team. One of those was a training facility that we spent, I think in total, probably well over a $1.5 million on building out a dedicated place, in Santa Monica of all places, to train and develop all of our athletes across all of our different teams.

We also decided to invest in long term contracts with players that would be a brand extension of Team Liquid. One of those was most notably Doublelift. So not only buyout and transfer fees but, of course you know, salaries across the board kind of increasing based on our level of investment.

And we also invested into content, in our production to capture the narratives and storylines. These are big dollar items, they require a lot of time to manage, and we wouldn't have made those decisions if it wasn't for franchise.

Now, in this owners' meeting, we get an opportunity to talk with the other team owners and ensure that they're also making substantial investments into the same league and kind of hold them accountable alongside Riot in kind of an equal way to ensure the league's success.

Sharon: And Rick, has franchising allowed you to do anything that you weren't able to before?

Rick Fox: WIN! We actually won a little bit.

I don't know if franchising had anything to do with it, but it sure changed the fortunes of the way we went about our season. We were able to be more patient. We were able to develop our free agent approach with a long term vision of how we wanted to compete. I think everyone felt more relaxed about committing dollars and committing to the story of their organization.

But then all in all, it's only been a split, so it is still new, but it's a good new. It's a partnership, and today was an example of Riot choosing the right people to be in that room, first of all. As owners and as partners, I think we got off to a great start.

Sharon: On Riot's end, are there any metrics of success you're able to share in terms of this last split?

Riot Chopper: I think the one that we go to most natively will be viewership, and when you look at viewership over the last split, we've been pretty excited with where those results came out. With all the changes that were made, for fans to actually be watching more LCS now than they were a year ago is pretty encouraging fact for us.

We were worried that there was going to be an acclimation effect, where fans weren't going to necessarily know, "Is this my league anymore? My favorite team got removed in franchising." And we saw teams like 100 Thieves fill that void and much more immediately, and command attention from these fans in a way that we hadn't necessarily seen previously from certain teams.

So I think for us, the viewership is probably the primary metric that makes us feel pretty strongly about the direction that the league is going in. I think anecdotally, in terms of ecosystem health, there's a lot that we can point to. I can't necessarily share specifics on some things, but things like player salaries have gone up incredibly. And not only in terms of the amount that they're getting paid, but also in the long term security that Steve was talking about. I think at this point 70% of our league are on multi-year deals. That's an unprecedented figure for our sport, where there were players who were on month by month deals only a couple of years ago.

If we can keep the players happy, and we can keep the players healthy, they're the ones on whose backs we're building the league with. We need to have them to continue to compete. So as long as the players are in good shape, and the teams are able to support that economically, that's the greatest indication of the health of the league.

Sharon: So just to be clear, is viewership up?

Riot Chopper: Over last year, yeah.

Steve: I think you were mentioning one of the statistics was the semifinals from last year to this year. The teams were different, and it wasn't the TSM and Cloud9 game.

Riot Chopper: Yeah, we were we were looking at the playoffs this year. And this year I think for the first time we had both TSM and Cloud9 in 3, 4, 5, 6--the quarterfinal round. And so we actually saw pretty strong viewership there.

But the concern that we had was how much of that was driven just because it's TSM and Cloud9, and what happens when neither of those clubs participate in the semifinals? But we still actually had a stronger semifinal viewership this year than we did last year. It proved to us that these new clubs — 100 Thieves, Clutch — these guys can build an audience. And clubs like TL have been able to really command an audience.

For us, that was the exciting part: seeing this group of owners step into that vacuum and say, "We're teams, and we're strong brands. We're here to compete." And the fans responded positively.

Sharon: You guys are tracking viewership per team as well, which team kind of brings in the most viewers. Are we seeing a more even spread across teams than we did in past seasons?

Riot Chopper: For sure. I think if you go back two or three years ago, you saw essentially the big three teams commanded in some cases 80-90% of a season's fandom. Right now, we're seeing a much more evenly distributed split. Not only in that there is no longer as dominant a player as TSM might have been in years past, but also all of the teams at the bottom are higher than the lower ranking teams were previously. So it's a much more sort of equal spread in fandom, and that level of fan parity is a really good thing for the league.

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Sharon: Okay back to you guys [owners]. When Riot began all this, they said they were picking a spread of teams that could really have a strong collective knowledge, that could cover each others' weaknesses. So each of you, what do you think is something that your team is bringing to the league or teaching other teams or owners?

Nadeshot: Well I think one thing that we've been focusing on at 100 Thieves... We have to differentiate ourselves from everybody else. We have to, we're a new team. We can beat ourselves to death trying to put together a team that's going to win, but at the end of the day, our success is not going to be defined by our wins and losses.

We're going to build a community around the thoughtfulness of our content, the way that we treat our players, and the way that we interact with the community of League of Legends. I mean we were a brand new team that nobody had ever really heard or seen before. We sprouted up, put together a house, a business strategy, a team in about a month's time.

We took Aphromoo from CLG. He was with them for five years. How do we make an impression on those people that have been watching their entire career and see him go to a new team and not hate us? You know? That was something that was difficult, but we create content around Aphromoo and made sure that he was comfortable, made sure that he felt like he was at home.

I think people notices those types of things. So for us, I think our biggest focus right now has just been our branding and our content. I think the content is the gateway to all success when it comes to a successful brand. In my mind, other people might disagree, but for me that's just always been my ticket. That's what I've always used to connect with an audience, and that's what I feel the most comfortable doing. I think with the help of our talented production team, we have really brought some fresh content. I keep using that word, but we've done things a little bit differently. And I think reddit, and the viewers, and Twitch chat, and the LCS community, they've noticed that we've approached it with care and thoughtfulness.

Sharon: Do you feel like you brought of a different flavor to the scene? I think some fans and brand-minded people see a more gritty brand than we usually see in the LCS.

Nadeshot: I don't know if I would use the word gritty. I think we’re gritty in the sense that we have our sleeves up, and we're doing everything that we can to be a successful team in the LCS.

One thing that we pride ourselves on is that we didn't want to be a team that was going to be 8th, 9th, 10th place in our first season. It wasn't good for anyone. It wasn't good for all the teams that had to exit the LCS. It wasn't good for any of the teams that were already here. It wasn't good for the community.

So we invested a lot, and we put in a lot of hard work from the ground up to make sure that we were prepared on day one for our first match. In that sense, I would say we've been rolling up their sleeves and in the trenches doing everything that we can to to be successful.

But you know, our personality is still being defined. A lot of people asked me, what does 100 Thieves stand for? And down to the very core of the two words "100 Thieves" is "Take what's not given to you.” But our culture and who we are as a brand is going to be defined by all the people that work and create our history.

Everybody asked me that question when we announced 100 Thieves. What does it mean? What do you guys stand for? I don't have anybody here yet to do that with me. I want everybody who works for our team, who plays underneath our banner, to have an impact on our future, and our vision, and our goals, and everything that we're trying to do together. So we just haven't had enough time to really create an identity, but we're doing a good job so far this year.

Sharon: Tossing it over to Steve and Rick, what do you think is the unique brand flavor or expertise that you guys bring?

Nadeshot: When I saw you looking up at Jared Jeffries, I was like "What the fuck is going on?".

Riot Chopper: When you were brought in for the application, I was like come on. I'm a tall a dude but this is ridiculous.

Rick Fox: A lot of us individually come from experienced sporting backgrounds, so I think we bring an add to the group of owners competitive fire that is steeped in wanting to win championships, but not necessarily having an edge on anyone else that is in space, simply because this is not basketball. This is not hockey, where our CEO Stratton comes from.

But it is sports. So our brand sprung out of just the love of video games, and the love of supporting anyone's passion to make video games their life and competing a career. We just continue to try to find players who aspire to be champions, and we put everything we can behind them to achieve that. And after bringing that individual focus to our players, now we're trying to bring that passion to our partners, who we are really grateful to be in business with.

Steve: Yeah for Team Liquid, we’re a very player-first organization. Through the last six years of LCS, I think somewhere towards the number probably 75 maybe 100 players have went through the Team Liquid organization at one point in time. And we've developed athletes that are now playing on other teams, and we kind of pride ourselves of that a little bit — that they were able to develop as an athlete under Team Liquid and to feel safe and secure that it was a good place to start their career. And if their careers blossomed on other organizations in a year's time, we allowed that to happen.

You know, a great example is actually Cody Sun, who was part of the Immortals transfer that went through. Once we signed Doublelift we said, "Hey Cody, you can play for any team you want. Just choose the team. Go talk to them. I'll make sure all the terms are good to go. We'll make it super reasonable and follow through with it." And now we're playing against him in the championship.

So player health and taking care of the players has always been important to us, and also transparency. Even when it's sometimes tough, we saw that with Breaking Point, obviously. But we want to be honest. We want to be open to what's going on, and we want to share that message with our fans. We feel like we owe it to them. Those are some of the principles that we carry with us.

Sharon: Talking about branding and fan acquisition, I think the main ways we do that is content, performance, social, player publicity, and overall brand strength. Where amongst those do most LCS team need to improve?

Rick Fox: All of them. I mean, if we're going to grow as a League, every one of those silos of expertise has to get better. Individually, maybe at different teams, we do certain things better than others. But I think we should all be collectively striving to master all of them. We're nowhere near where we're gonna be but we're gonna get there.

Nadeshot: Team Liquid needs to spend more money and Echo Fox needs to get shorter.

Riot Chopper: Rick's the only person who could say we're subpar on all of those and make you feel good about it.

Riot Chopper: I do think, though, we're seeing the strides being made. It just takes longer for it to pay off. I think you're seeing through the content the teams are doing - they're starting to diversify a little bit.

The Heist is great content from 100 Thieves, but they've gone beyond that and they do the Vault. They decided to take what a content piece that a lot of teams do — the sort of weekly in and out documentary — and they did that piece and they did it well. But then they go, "How can we put a spin on this?" and they deep dive into just comedic moments and they showcase them with very little production and just kind of put it out there for additional consumption.

Elements like that I think are going to start to pay off for teams, where you just see teams take little bets in different directions. As they start to pay off, they'll be able to play farther and farther out field, because teams now have the time to think about this kind of stuff. They don't have to think about "I have to make sure that I pass the relegation/promotion tournament this split." They have the time to think about, "How do I want to present myself to fans?"

We had plenty of teams who came in and said my brand is winning, and we largely disregarded anybody who said that. Because it's just so disingenuous, and it's so non-unique, and it doesn't bring anything to the league.

If we had someone who came in and said, "We're going to be the heels, we're going to be the villains of the league." "We're going to play that card." Or, "We're going to be the player advocates, and no matter what we're always going to stand for the players." Or like, "We're going to bring this kind of edge, or we're going to tell this story about who we are." That's what I care about.

Rick's totally right. We have to grow across every one of those metrics. But as someone who's kind of sitting in the seat where I'm largely responsible for these guys being in the room, I couldn't be happier with the way they're going. So yes, we have a lot of room to grow. But I don't hold it against these guys that we're not there yet. This is the kind of thing that takes time. Matt's shown that you can build a winning League of Legends team in a split. You cannot build a compelling brand in three months. And so that's the kind of stuff where we'll take the time to do it, and we'll take the time to do it right.

Sharon: There does seem to be teams out there who are struggling, and not just in performance, although that does affect popularity. Teams like OpTic, Golden Guardians, even CLG, I think are struggling with their identity, fan acquisition, on top of performance. You guys as their partners and Riot, what do you do to help them?

Nadeshot: We'll I'm not giving Aphromoo back. [laughing] I don't know what I can do for them. They messed up.

Rick Fox: I would say having entered the space as a CLG fan, I don't have any doubt in the ebbs and flows of transition in professional sports with teams and players. Aphromoo, obviously, a huge part of their organization for a number of years. That's a huge void that they're having to transition out of. Very quickly into the second half split, you saw what traditionally you were custom to seeing, which we were all waiting for--quite frankly hoping that they wouldn't show up. You know, the wave started to come.

And so the summer split is where we're heading into next. But TSM, Cloud9, CLG… I'm not gonna even lie. That's the thing I focus most on right now. Because I know we're not going to see two splits back to back the way we just saw happened here in the end. So you’re looking over your shoulder. You're already thinking, "OK it's nice to be in the position we're all in now at this weekend." But people are going to get better. And so Optic is new — I mean they have one split under their belt. They're going to make improvements and we know that's going to happen. Other people are going to get opportunities to be a pro because of it potentially. And who knows, as quickly as 100 Thieves vaulted to the top standings here. You know...

Nadeshot: It could all come crashing down.

Rick Fox: It can swing all different ways. And so that's the challenge of being in an owner. That's the challenge of keeping your org together, motivated, focused, and inspiring your players in understanding that you can't rest on your laurels. You got to keep improving. The goal is not to win the split. I mean it's going to be nice for one of these guys. The goal is to win worlds and that's still a long ways away.

For us as competitors, to sit here and worry about them in the Rift, I'm not worried about any of those guys. They know they have partners outside of it, and so none of us at this point are concerned collectively about this healthiness of the league. We're going forward together locked arms and strong. But you know on the Rift, these guys aren't going to be friends tomorrow. And that's OK. That's the way it's supposed to be.

Riot Chopper: The other thing I would add is that a lot of people were worried when TSM and Cloud9 got knocked out of the quarterfinals.

Rick Fox: Not Steve.

Steve: I saw a lot of TSM fans rip their jerseys off and put TL jerseys on.

Riot Chopper: From my perspective, I'm excited to see you a new team bring a championship in this weekend. I think it spells great things for the future of the league and where these teams are going. Part of what makes leagues like the NBA great are that you can have the Jordan Era at the Bulls and then they could struggle after Jordan leaves. The Pats struggled before they had Brady, and they had the Brady Dynasty. Who knows where they'll be three or four years from now like. It's a testament I think to Matt and the team that he's built that they've been able to achieve success so fast.

But that's the exception, not the rule, and so to try and grade Optic and Golden and some of these guys against the pace that these guys have set is frankly unfair. I mean what they did has little precedent in history in League of Legends, much less general sports.

Nadeshot: This is great. I love this. Keep talking. We have time for more questions.

Riot Chopper: I think there's a degree to which 100 Thieves should be lauded for having that early success. But it shouldn't be a reason why you hold it against other orgs. I have just as much confidence in OpTic. I have just as much confidence in Golden Guardians. Like those dudes are passionate, they want to win. And trust me, they might not be playing on Sunday, but they're going to be spending every minute of the match on Sunday watching and trying to figure out how they can get better and beat these guys come the first game of this summer split.

Rick Fox: Clutch Gaming too.

Nadeshot: They crushed it this split.

Rick Fox: I lose sleep over C9, TSM, and CLG not being here this weekend. Because I know the preparation has begun for some of them already.

Nadeshot: Yeah. Damn it. I hope we beat you, Steve.

NA LCS

Sharon Coone

Sharon spent three years as a video game encyclopedia (Editor in Chief) at Twinfinite. Now she just brags about the time she got to Gold in League of Legends using a trackpad.

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